THREE million council house tenants face losing the right to stay in their homes for life.

A Government report out tomorrow is expected to say the current system of social housing is out of date.

And it looks likely to pave the way for major reforms including time limits on how long someone can remain in their council home.

Economist Will Hutton, who advises Tony Blair, said: "Council housing is a living tomb.

"You dare not give the house up because you may never get another. But staying is to be trapped in a ghetto."

But Adam Sampson, of Shelter, said the plans were "terrifying".

He added: "People in social housing are often poor families, single parents and the longterm sick and disabled.

"They need and deserve security and affordable rents, not the fear and uncertainty of homelessness." Communities Secretary Ruth Kelly will unveil the report by housing expert Professor John Hill of the London School of Economics.

It is expected to call for oldfashioned estates where tenants settle for life to be broken up.

And children will no longer have the right to take over their parents' tenancy.

More will be done, including offering cash bonuses, to move people out so that those in dire need can get a home.

Tenants could be meanstested and lose their cheap rents if their income goes up.

But there are fears that the measures could give added ammunition to right-wing groups such as the BNP.

Left-winger Jon Cruddas, MP for Dagenham in Essex, said: "Access to housing is becoming racialised because of a lack of supply.

It's feeding extremist political forms."

Industry minister Margaret Hodge warned last year that white, working-class voters were so angered by immigra- tion and a lack of affordable homes that they were flocking to the BNP.

A Government source said that in some estates there was "concentrated deprivation". He added: "We need to see how social housing can help us create genuinely mixed communities - places where people from different backgrounds and at different life stages live together."

But Alan Walter, of Defend Council Housing, warned there could be a backlash from the three million council tenants.

He added: "The right to a secure, life-long tenancy was a hard-won right against Victorian landlords, exploitation and Rachmanism. There is a strong, right-wing pressure within government to get rid of this."

The Department for Communities and Local Government said: "We are increasing the building of new social housing by 50 per cent and tackling the #19billion backlog of repairs.

"But we need to go further with more market homes, shared ownership and social housing to meet the needs of the next generation."